The Buy Borrow Die Strategy | How The Ultra Rich Stay Rich and Pay $0 in Taxes

Congress has been having heated debates about taxing the richest people in America. There are currently 700 billionaires who hold over $5 trillion in total assets. Congress is trying to pass the budget reconciliation package that includes social spending bills and other infrastructure proposals. Congress has proposed to tax billionaires' untaxed capital gains because they never sell their assets. Billionaires and millionaires have been using the Buy Borrow Die Strategy so they pay little to no federal income taxes or capital gains taxes. You'll find out in this video how the Buy Borrow Die strategy could work towards your advantage if you are looking to achieve Fat FIRE.

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⏰ Table of Contents ⏰
0:00 Tax The Rich?
1:39 Buy Borrow Die
4:32 Buy
6:31 Borrow
9:30 Die

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Disclaimer: I am not a financial advisor. I am solely sharing my personal experience and opinions. All Strategies, tips, suggestions, and recommendations shared are solely for entertainment and educational purposes only. There are financial risks associated with investing. You must conduct your own research and due diligence, or seek the advice of a licensed advisor if necessary.

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[WRcolor]

thank you for the great introduction. I just have one question: after getting the SBLOC, how do I repay it? If I had to sell stock to pay it back, I would lose the tax benefit. Or do I only need to pay the SBLOC interest and can hold the SBLOC until I die?

[lahart]

Hi Psy! This is an awesome informational Channel. Gonna binge on your perspective for a bit. Enjoying this so far! Thank you for sharing your knowledge!! 🌟👍🏼

[jayybee]

You don’t have that many followers. But I want to let you know you are going to blow up on YouTube soon these are amazing videos. Very informative

[joannahzamora]

I love how your videos are simple and short and to the point. You aren't sensationlized or trying to get people to throw their money into something. Your quick, direct, simple, and accurate, and it's very refreshing. ❤

[stephtraveler]

Too late. The fundamentals no longer work. Interest rates are too high for profits. Real Estate is too high and on a downward trend. HOA's are now too high in most places due to new insurance requirements (based on the new rules when that condo collapsed in Miami). Buy, borror, die is DOA.

[FIREPsyChat]

What do you think of the "Buy Borrow Die" investment strategy?
Join my private community: www.firepsychat.com/community

[bjjgarage]

I dont' get how it works if you have 0 income but live off of a PLOC. If you're living off 100% PLOC and the interest rate is 2%, then how do you have the extra cash flow to pay off the interest if you have 0 income from a job or business? Does that mean you have to withdraw some of your security investments to pay off that 2% interest which triggers 20% capital gains tax?

[stanton]

Great video and tactic to leverage assets. I understand the principle. But what would I do to pay the interest payments? Like a credit card, you have minimum payments to make back. I understand taking a stock portfolio, borrowing 10-20% against it to put a deposit on an investment property to rent out. But how would you borrow against to live on? If I have a $1 million dollar stock portfolio and I borrow 10% against it $100k surely I would have to pay that back over the months and years. I have heard about refinancing. If the appreciation in the asset is greater than the interest you clear the debt and increase the amount borrowed. But I can't see an institution waiting a year or two to for payments on the interest. I'd have to pay something back each month.

[KennyZ]

Great video. Thinking of using BBD for early retirement using stocks. My taxable account is basically etf's SCHD/DGRO. My yield on cost should increase with the portfolio value long term. It seems crazy getting to a point where portfolio growth outpaces margin spending.

[harikrishnanchandramohan]

@Psy. If you have to sell your securities at one point to pay back your SBLOC, you anyway incur capital gains. So what's the point of taking sbloc? Or the SBLOCs are only repaid by your heirs after you die. In that case, it makes sense but do brokers offer SBLOC for your entire life?

[retiredbroker]

plus inflations at 8% that makes debt cheaper

[georgeemil]

From the financial institution's point of view, why would it keep giving out sbloc loans every year if the borrower is never going to pay them back until he dies?

[jinkzer]

Awesome video! It was very informative and helpful.

[MonarchAirVideo]

I don’t think we should tax the billionaires. Almost all of them add something for the country without paying taxes. Their assets are solving problems and providing jobs.